Long arm of UK bribery act stretches to Cayman

(CNS): Anyone holding a British or British Overseas Territories Citizen passport had better ensure they are familiar with the UK’s recently passed Bribery Act (BA), which came into force in July of this year, because they could fall foul under this law, even when they are outside the UK, according to former Cayman Islands Monetary Authority Chairman Tim Ridley. The offences under the law are very broad, Ridley warned, and nothing requires dishonesty to be proven.  Speaking at a seminar held at the Westin, Tuesday, by the Cayman Islands Compliance Association, the first formal presentation of Cayman’s own bribery legislation, the Anti-Corruption Law (ACL,) Ridley said the act had a “long arm”.

The BA creates four main offences, including promising or offering an advantage (financial or otherwise), with the intent to induce someone to perform improperly a ‘relevant function or activity' or to reward a person for doing so; likewise, penalties would occur if someone requested or agreed to receive such a bribe. 

For example, If someone offers someone in the planning department an incentive for getting their application through ahead of others, or without the relevant paperwork, that would be an offence under the BA. The BA does not only apply to public sector workers; private sector workers are also subject to the BA, he said. The law also makes it an offence to bribe a foreign public official.

The UK, he said, has been slow to enact such legislation (indeed, the Cayman Islands enacted its ACL at the beginning of 2010) because multi-national businesses dealing with countries with “rich resources and poor governance” may have difficulties with such legislation. Thus there had been a fear that the competitive element for such businesses would be lost.

Nevertheless, the UK was obliged to abide by its international treaties and therefore produced the legislation, which was far more concise than Cayman’s ACL, at 17 pages versus Cayman’s 54 pages. This was partly down to the UK already having in place other legislation which dealt with similar issues, and also a lesser amount of varying penalties applied to offences under the BA, Ridley advised.

The “extraterritorial component” of the BA was that it applied to any person’s acts or omissions outside the UK, if that person has close connections with the country, was a citizen or resident, a BOTC or a UK company. Thus, he said, a Caymanian who bribes a public official in Cayman or elsewhere can commit an offence under the BA as well as the ACL.

Ridley also described how it was an offence under the BA for a commercial organisation if a person associated with that organisation, such as an agent (with not necessarily any UK connections), bribes another person for the benefit of the organisation. The organisation could use in its defence that they had installed adequate procedures to prevent bribery, he added.

He used the example that an agent or representative in Cayman of a UK company bidding on an infrastructure project would commit an offence under the BA if they paid a bribe in an attempt to secure the contract for the organisation.

Penalties for such offences include imprisonment for up to ten years and unlimited fines. Anyone convicted of such offences in the Cayman Islands would most likely have those offences termed a predicate offence under Cayman’s Proceeds of Crime law as well, Ridley confirmed.

He also added that directors or officers of Cayman companies should be especially conversant with the BA because they (and the company as well) may be liable under the law if the offence was attributable to their neglect of duties, not just their consent or connivance.

“The act has major implications for businesses and individuals both within and outside the UK. Businesses must review their relationships with agents and third parties to understand what roles they undertake for the company and to define who is and who is not an 'associated person' under the act,” he stated.

“Further, businesses must put in place adequate systems and procedures to prevent bribery that will apply to all associated persons (as well as employees).” He added: “Those individuals resident in the UK and those non-residents holding UK passports (of all kinds) need to be aware that the Act has a long arm.”

Ridley called on the Anti-Corruption Commission for guidance on the ACL (which, he said, was very similar to the BA) for the business community.